The U.S. is expected to overtake Saudi Arabia as the world's leading oil producer by 2020, according to the International Energy Agency.
As the U.S. moves toward energy self-sufficiency, domestic oil and gas producers face mounting pressure to improve safety, meet environmental standards, and increase efficiency. Profire Energy (OTCBB: PFIE), a technology company and leading provider of burner management systems (NYSE:BMS) to oil and gas companies, fills a critical market void. The Company's products provide a safe and efficient solution for re-ignition and temperature regulation for use on processing vessels in the oil and gas industry.
In order to process the oil or gas, these vessels require heat provided by a burner. The flame occasionally extinguishes, creating production inefficiencies. Traditional methods for reigniting failed flames include using a rag tied to a stick, an antiquated method that puts the technician in danger. Profire's BMS technology is able to quickly and safely reignite a failed flame, minimizing production loss and keeping employees safe. The Company's technology meets U.S. Environmental Protection Agency standards, and optimizes efficiency by decreasing waste heat and fuel consumption.
With the expectation of increasing worker safety initiatives and environmental regulation, PFIE is poised to benefit as oil and gas companies are required to maintain compliance. Oil and gas companies will need to purchase the type of products made by PFIE, or risk facing costly fines. PFIE's high-quality products have attracted top multinational clients such as Exxon Mobil, Husky Oil, Devon Energy, Shell, and ConocoPhillips.
Current penetration for BMS technology in the U.S. is estimated at only 1% to 1.5% of a $2.5 billion to $6.7 billion overall market. PFIE has a strong first-mover advantage and is the largest operator in the space. The Company's competitors are small, private regional companies, the largest of which only generates about one-third of PFIE's sales volume.
PFIE grew revenues 98% and net income 88% year-over-year for the fiscal year ended March 31, 2012. Following the Company's strong sales growth in western Canada, PFIE is now expanding its U.S. sales efforts, opening offices in Texas and Utah to serve new and existing customers in these major oil and gas hubs. The Company also added a distribution channel in Brazil, South America's largest economy. Trading under $2, PFIE is an exciting opportunity for investors to profit from America's energy boom.
To learn more about PFIE, watch our recent "Money Report" interview with Andrew Limpert, the Company's chief financial officer.
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